Cattle for sale, Eidsvold.
Cattle for sale, Eidsvold. Tobi Loftus

Abattoirs feel the grind in tight market

CATTLE are in high demand, with prices driving competition between restockers, feedlots and processors.

While producers are the winners at this stage, consumers, buyers and abattoirs have felt the pinch of the high prices and a low herd number.

It has been predicted the national beef cattle herd will fall by 2% to 23.7 million per head by the middle of this year, which will place further pressure on meat processors.

Cattle Council of Australia president Howard Smith said the demand globally and domestically for beef was very high and the supply was restricted as a result of the drought and subsequent herd selloff.

"It does have an effect on abattoirs," Mr Smith said.

"There has been reduced kills and shifts and that's caused some plants to not open and it's been largely due to the massive kills we've had in the last couple of years."

This financial year, ABARES has predicted the weighted average saleyard price of beef cattle will increase to an average of 530c/kg.

While the producers are the ones benefiting the most in the current market, South Burnett freelance cattle buyer Steve Dunn said it was a long time coming.

"It's been wonderful for the producer because we needed the financial influx of funds after the devastating drought," Mr Dunn said.

"If you look at the last three years, the processing industries built up their profits and have gone from a perfect storm of over supply to a perfect storm of under supply.

The bottom line is that markets go in cycles and now it's obviously time for the producers to get into a healthier position."

Mr Smith said the market would level out eventually and an increased supply would come with it.

"There's a place for all participants in the beef industry and we need a healthy, diverse industry to go forward," he said.

"It's not about favouring one over the other.

"It's been timely after the processing sector was overwhelmed."